Economy News

Seoul to Begin Trial Service of Zero Pay for Easy Smartphone Payment

12/26/2018SMG1196

Seoul will begin the trial service for the new payment option, Zero Pay Seoul, which enables convenient payment through a smartphone without the use of credit cards or cash. The service offers consumers a 40% income deduction, with zero commission for small businesses.

Zero Pay images

<Zero Pay QR code>

<Member store sticker>

Zero Pay Seoul is a mobile direct payment system that allows consumers to immediately transfer payment from their personal bank account to that of the seller once they simply scan the Zero Pay QR code displayed at the counter on the smartphone app and input the payment amount. Small businesses with less than KRW 800 million in annual sales can benefit from 0% commission rate through payment with Zero Pay, which will be available to the majority of small business owners.

Twenty-six franchises under direct management of headquarters, including Paris Baguette, Paris Croissant, BHC, Lotteria, Angel-in-us, Krispy Kreme Doughnuts, and other shops located in heavily populated areas, like the Gangnam Terminal and Yeongdeungpo Station underground shopping centers, are planned to partake in the trial service.

While a total of 24 financial institutions, including twenty banks and four easy payment companies, are also set to join Zero Pay Seoul, consumers are required to download a bank app or easy payment app on their smartphones prior to service use. People using the applicable bank apps can transfer payments from personal accounts. The Zero Pay service will also be added to existing apps, while people using easy payment apps must register their personal bank accounts on the apps prior to service use.

Locations with the Zero Pay payment option, income deduction, and other benefits, will kick into high gear starting in 2019. In accordance with a related law revision in 2019, a new income deduction rate of 40% will be applied to actual refund benefits.

tax rate Zero Pay

Total income

Income tax rate

Use amount

Refund amount

Difference(B-A)

Credit card deduction rate

Refund amount (A)

Zero Pay deduction rate

Refund amount (B)

KRW 30 million

15%

KRW 15 million

15%

KRW 168,750

40%

KRW 450,000

Approx. KRW 280,000

KRW 50 million

15%

KRW 25 million

15%

KRW 281,250

40%

KRW 750,000

Approx. KRW 470,000

KRW 70 million

24%

KRW 35 million

15%

KRW 630,000

40%

KRW 1,680,000

Approx. KRW 1,050,000

Benefits for public facilities will start with subsidiary facilities of Seoul, including 10-30% discounts for admission to the Sejong Center for the Performing Arts and performance tickets to the Seoul Philharmonic Orchestra. In 2019, related systems will be improved for use of Zero Pay at Seoul Grand Park, Seoul and 25 self-governing district subsidies, publicly-funded policy, the public bike rental program, Ttareungyi, and public parking lots.